Value Stream Transformation

Updated: Sep 29


Manufacturing firms seek excellence to stay competitive and deliver value to their customers efficiently and effectively. While most operations strive to provide world class products and services, quite often they fail to meet their financial and operational objectives. Low productivity, missed deliveries, project delays, reduced profit, low customer satisfaction, quality issues and operational complexity are a few examples of undesired situations that manufacturing firms must deal with if their operations system is not sufficiently robust.


In this article, we will discuss some of the main prerequisites that are needed to prepare the organization to go through a value stream transformation. We do not intend to provide our audience with a silver bullet that can solve all these problems at once. We all know that such solutions do not exist. We do not plan to go over the lean and operational management tools either. Even though concepts such as value stream mapping, pull and Kanban, 5S, standardized work, waste elimination, quality at the source, SMED, etc. are great tools to make successful transformational changes, we need to understand these prerequisites well before getting to the toolboxes.


Why:

Is there a strong reason behind the need for transformation and is the leadership team ready to change the status quo?

Just recently, we created a poll in our LinkedIn page and asked our audiences to answer a simple question; why lean transformations fail? Interestingly, over 60% of the operations leaders who responded to that question, selected the “lack of leadership support” as the most common reason for transformation failures. We believe this happens because the needs for such transformational changes are not understood by the organization’s leaders. If the leaders of an organization do not have a strong motivation for the change, they will not support the short-term distractions that are needed to make transformational changes. Back to the first paragraph, if an organization is dealing with those listed undesired situations on a regular basis, then the problem is obvious, and it demands a solution.


Customer focus:

Does the organization know its customers and their true needs?

After reaching agreement at the leadership level that the business must change to stay competitive, the first step is to understand who the ideal customers are and what matters most to them. This might seem like a simple question at the first glance but understating the customers true needs and translating them into actionable processes is not an easy task. On the surface all customers seem to look for on time delivery, acceptable quality, and reasonable pricing. But there are many subjectivities involved in those requirements. Clearly defining who the organization wants to serve and what really matters to them and other stakeholders has a huge impact on the organization’s operations system.


People Readiness:

Are the people across the organization equipped with the right culture and toolbox?

The famous Toyota Production System (TPS) is defined as a house with two pillars. These two pillars that keep the entire system intact. The first one is the people pillar. While the corresponding core concept in TPS is respect and employee’s engagement in decision making, we believe having the right culture is another dimension of that pillar. If an organization does not have a strong culture and its culture does not value and practice the excellence, keeping the employees excited and supportive throughout the transformation will not be an easy task. And if the team’s motivation is lost, the journey will not be a pleasant one and it will not produce the expected outcome.


The transformation planning and execution can only begin after these three fundamental questions are critically reviewed and answered. Even if the organization has acceptable level of leadership support, a clear understanding of customer needs, and a strong culture, there will be other unexpected roadblocks throughout the journey. But having these three boxes checked and keeping them fresh helps the organization stay on track and correct the course until the desired objectives are achieved.